Analysts Just Made A Major Revision To Their Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) Revenue Forecasts
One thing we could say about the analysts on Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the most recent consensus for Hannon Armstrong Sustainable Infrastructure Capital from its seven analysts is for revenues of US$133m in 2023 which, if met, would be a huge 21% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 579% to US$1.45. Before this latest update, the analysts had been forecasting revenues of US$151m and earnings per share (EPS) of US$1.52 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.
View our latest analysis for Hannon Armstrong Sustainable Infrastructure Capital
Analysts made no major changes to their price target of US$43.50, suggesting the downgrades are not expected to have a long-term impact on Hannon Armstrong Sustainable Infrastructure Capital's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hannon Armstrong Sustainable Infrastructure Capital, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$29.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Hannon Armstrong Sustainable Infrastructure Capital's growth to accelerate, with the forecast 29% annualised growth to the end of 2023 ranking favourably alongside historical growth of 16% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 46% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Hannon Armstrong Sustainable Infrastructure Capital is expected to grow slower than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Hannon Armstrong Sustainable Infrastructure Capital. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Hannon Armstrong Sustainable Infrastructure Capital's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Hannon Armstrong Sustainable Infrastructure Capital after today.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Hannon Armstrong Sustainable Infrastructure Capital's business, like dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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